Loan/Lease

ID:
Office:
UILC:
CCA_2011012709442650
---
4975.03-02
Number: 201108034
Release Date: 2/25/2011
From: ---
Sent: Thursday, January 27, 2011 9:44:30 AM
To: ---
Cc:
Subject: Guaranteeing a Loan
This is in response to your voice message.
With respect to the issue concerning signing personally as guarantors of a note, Congress stated in the ERISA Conference Report that, “…a prohibited transaction generally will occur if a loan to a plan is guaranteed by a party-in-interest [disqualified person], unless it comes within the special exemption for employee stock ownership plans.” H.R. Rep. No. 1280, 93d Cong., 2d Sess., at 308 (1974). Consequently, a guarantee of a plan’s indebtedness by a fiduciary or other disqualified person is an extension of credit to the plan in violation of section 4975(c)(1)(B) of the Code. See the attached DOL Advisory Opinion 90-33A (July 3, 1990) and DOL Advisory Opinion 2009-03A (October 27, 2009).